{"id":459,"date":"2024-07-06T16:14:27","date_gmt":"2024-07-06T16:14:27","guid":{"rendered":"https:\/\/cedsto3.dreamhosters.com\/mbh\/removal-of-preferential-exemptions-act-2018\/"},"modified":"2024-07-07T15:56:52","modified_gmt":"2024-07-07T15:56:52","slug":"removal-of-preferential-exemptions-act-2018","status":"publish","type":"post","link":"https:\/\/cedsto3.dreamhosters.com\/mbh\/removal-of-preferential-exemptions-act-2018\/","title":{"rendered":"Removal of Preferential Exemptions Act, 2018"},"content":{"rendered":"\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-lybq8ryy-bbf103e9827c76da7094f8d8e8a491fe\">\n.avia-section.av-lybq8ryy-bbf103e9827c76da7094f8d8e8a491fe{\nbackground-color:#3d3d3d;\nbackground-image:url(https:\/\/cedsto3.dreamhosters.com\/mbh\/wp-content\/uploads\/2024\/07\/corporate-services-bg-2.jpg);\nbackground-repeat:no-repeat;\nbackground-position:50% 0%;\nbackground-attachment:scroll;\n}\n<\/style>\n<div id='av_section_1'  class='avia-section av-lybq8ryy-bbf103e9827c76da7094f8d8e8a491fe main_color avia-section-no-padding avia-no-border-styling  avia-builder-el-0  el_before_av_section  avia-builder-el-first  avia-full-stretch avia-bg-style-scroll av-minimum-height av-minimum-height-60 av-height-percent  container_wrap fullsize'  data-section-bg-repeat='stretch' data-av_minimum_height_pc='60' data-av_min_height_opt='percent'><div class='container av-section-cont-open' ><main  role=\"main\" itemprop=\"mainContentOfPage\"  class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-459'><div class='entry-content-wrapper clearfix'>\n<div class='flex_column_table av-1x11rv-b4e21983d948c1c1601bc17943c7b5dd sc-av_three_fifth av-equal-height-column-flextable'><div  class='flex_column av-1x11rv-b4e21983d948c1c1601bc17943c7b5dd av_three_fifth  avia-builder-el-1  el_before_av_two_fifth  avia-builder-el-first  first flex_column_table_cell av-equal-height-column av-align-bottom  '     ><style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-lybq81l9-f6314a5094bf69baa8a0c642e080b55f\">\n#top .av-special-heading.av-lybq81l9-f6314a5094bf69baa8a0c642e080b55f{\npadding-bottom:10px;\ncolor:#ffffff;\nfont-size:42px;\n}\nbody .av-special-heading.av-lybq81l9-f6314a5094bf69baa8a0c642e080b55f .av-special-heading-tag .heading-char{\nfont-size:25px;\n}\n#top #wrap_all .av-special-heading.av-lybq81l9-f6314a5094bf69baa8a0c642e080b55f .av-special-heading-tag{\nfont-size:42px;\n}\n.av-special-heading.av-lybq81l9-f6314a5094bf69baa8a0c642e080b55f .special-heading-inner-border{\nborder-color:#ffffff;\n}\n.av-special-heading.av-lybq81l9-f6314a5094bf69baa8a0c642e080b55f .av-subheading{\nfont-size:15px;\n}\n\n@media only screen and (min-width: 480px) and (max-width: 767px){ \n#top #wrap_all .av-special-heading.av-lybq81l9-f6314a5094bf69baa8a0c642e080b55f .av-special-heading-tag{\nfont-size:0.8em;\n}\n}\n\n@media only screen and (max-width: 479px){ \n#top #wrap_all .av-special-heading.av-lybq81l9-f6314a5094bf69baa8a0c642e080b55f .av-special-heading-tag{\nfont-size:0.8em;\n}\n}\n<\/style>\n<div  class='av-special-heading av-lybq81l9-f6314a5094bf69baa8a0c642e080b55f av-special-heading-h1 custom-color-heading blockquote modern-quote  avia-builder-el-2  avia-builder-el-no-sibling  av-inherit-size'><h1 class='av-special-heading-tag'  itemprop=\"headline\"  >Legal Update<\/h1><div class=\"special-heading-border\"><div class=\"special-heading-inner-border\"><\/div><\/div><\/div><\/div><div class='av-flex-placeholder'><\/div><div  class='flex_column av-1qc12r-1f86ef76b7b184e4e54b7b241b5d7a14 av_two_fifth  avia-builder-el-3  el_after_av_three_fifth  avia-builder-el-last  flex_column_table_cell av-equal-height-column av-align-bottom  '     ><\/div><\/div><!--close column table wrapper. Autoclose: 1 -->\n\n<\/div><\/div><\/main><!-- close content main element --><\/div><\/div><div id='av_section_2'  class='avia-section av-1js40r-d9defd4638149a499b2077272aca09ad main_color avia-section-default avia-no-border-styling  avia-builder-el-4  el_after_av_section  el_before_av_section  avia-bg-style-scroll container_wrap fullsize'  ><div class='container av-section-cont-open' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-459'><div class='entry-content-wrapper clearfix'>\n<div class='flex_column_table av-1dy5dn-c74c6f4cd427daba76875805a1451cb8 sc-av_four_fifth av-equal-height-column-flextable'>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-1dy5dn-c74c6f4cd427daba76875805a1451cb8\">\n.flex_column.av-1dy5dn-c74c6f4cd427daba76875805a1451cb8{\nbackground-color:#ffffff;\n}\n<\/style>\n<div  class='flex_column av-1dy5dn-c74c6f4cd427daba76875805a1451cb8 av_four_fifth  avia-builder-el-5  el_before_av_three_fourth  avia-builder-el-first  first flex_column_table_cell av-equal-height-column av-align-bottom  '     ><p><br \/>\n\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-12eek3-54a8af13664cf94607dc0e1725bed3d3\">\n#top .hr.hr-invisible.av-12eek3-54a8af13664cf94607dc0e1725bed3d3{\nheight:50px;\n}\n<\/style>\n<div  class='hr av-12eek3-54a8af13664cf94607dc0e1725bed3d3 hr-invisible  avia-builder-el-7  el_after_av_codeblock  avia-builder-el-last '><span class='hr-inner '><span class=\"hr-inner-style\"><\/span><\/span><\/div><\/p><\/div><\/div><!--close column table wrapper. Autoclose: 1 --><div class='flex_column_table av-z6mcj-4ad02d7c2cd581dfebd4ad3791194035 sc-av_three_fourth av-equal-height-column-flextable'>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-z6mcj-4ad02d7c2cd581dfebd4ad3791194035\">\n.flex_column.av-z6mcj-4ad02d7c2cd581dfebd4ad3791194035{\nbackground-color:#ffffff;\n}\n<\/style>\n<div  class='flex_column av-z6mcj-4ad02d7c2cd581dfebd4ad3791194035 av_three_fourth  avia-builder-el-8  el_after_av_four_fifth  el_before_av_one_fourth  first flex_column_table_cell av-equal-height-column av-align-bottom  '     ><p>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-lybq95to-263c41ad89239e22c8973751d8ee0e6e\">\n#top .av-special-heading.av-lybq95to-263c41ad89239e22c8973751d8ee0e6e{\npadding-bottom:10px;\ncolor:#020202;\nfont-size:38px;\n}\nbody .av-special-heading.av-lybq95to-263c41ad89239e22c8973751d8ee0e6e .av-special-heading-tag .heading-char{\nfont-size:25px;\n}\n#top #wrap_all .av-special-heading.av-lybq95to-263c41ad89239e22c8973751d8ee0e6e .av-special-heading-tag{\nfont-size:38px;\n}\n.av-special-heading.av-lybq95to-263c41ad89239e22c8973751d8ee0e6e .special-heading-inner-border{\nborder-color:#020202;\n}\n.av-special-heading.av-lybq95to-263c41ad89239e22c8973751d8ee0e6e .av-subheading{\nfont-size:15px;\n}\n\n@media only screen and (min-width: 480px) and (max-width: 767px){ \n#top #wrap_all .av-special-heading.av-lybq95to-263c41ad89239e22c8973751d8ee0e6e .av-special-heading-tag{\nfont-size:0.8em;\n}\n}\n\n@media only screen and (max-width: 479px){ \n#top #wrap_all .av-special-heading.av-lybq95to-263c41ad89239e22c8973751d8ee0e6e .av-special-heading-tag{\nfont-size:0.8em;\n}\n}\n<\/style>\n<div  class='av-special-heading av-lybq95to-263c41ad89239e22c8973751d8ee0e6e av-special-heading-h1 custom-color-heading blockquote modern-quote  avia-builder-el-9  el_before_av_textblock  avia-builder-el-first  av-inherit-size'><h1 class='av-special-heading-tag'  itemprop=\"headline\"  >Removal of Preferential Exemptions Act, 2018<\/h1><div class=\"special-heading-border\"><div class=\"special-heading-inner-border\"><\/div><\/div><\/div><br \/>\n<section  class='av_textblock_section av-t0i7f-7d91323ab6709b3c949af24855a433be '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock'  itemprop=\"text\" ><p>The Removal of Preferential Exemptions Act, 2018 (the \u201cAct\u201d) was enacted in December 2018 to abolish \u201cring-fencing,\u201d a term used to describe a situation where a certain category in a group is entitled to benefits which are not available to the rest of the group. In The Bahamas, certain non-resident entities were entitled to tax exemptions which were not available to similar resident entities. The Act came into force on 31 December, 2018 and applies to entities which satisfy the following criteria:<\/p>\n<p>i) they are incorporated, registered or continued under the International Business Companies Act, the Exempted Limited Partnership Act, the Investment Condominium Act, 2014 or the Executive Entities Act, 2011 (the \u201cOriginating Acts\u201d);<\/p>\n<p>ii) their operations are or are intended to be exclusively carried on outside of The Bahamas; and<\/p>\n<p>iii) they are entitled to preferential exemptions which are not available to entities which operate in The Bahamas or they are not authorized to operate within The Bahamas.<\/p>\n<p>Every entity to which the Act applies must pay any tax which is non-nominal, meaning that it is not equal to zero or almost zero. Any provision in the Originating Acts which grants a preferential tax exemption is no longer in force. Specifically, the Act repeals the following statutory provisions:<\/p>\n<p>i) Parts X and XII of the International Business Companies Act (although a limited duration company already in existence shall continue to exist until the expiration of the relevant period of duration stipulated in its Memorandum of Association);<\/p>\n<p>ii) Section 17 of the Exempted Limited Partnership Act;<\/p>\n<p>iii) Section 25 of the Investment Condominium Act, 2014; and<\/p>\n<p>iv) Section 64 of the Executive Entities Act, 2011.<\/p>\n<p>If there is any conflict between the provisions of the Act and those of the Originating Acts or the Exchange Control Regulations Act (or any regulations made thereunder), then the provisions of the Act shall prevail.<\/p>\n<p>The Act provides for a three (3) year transition period, which runs from 31 December, 2018 to 31 December, 2021. During the transition period the following statutory provisions, which grant certain preferential exemptions, remain in force for the relevant entities so long as the entity was in existence prior to 31 December, 2018:<\/p>\n<p>i) Sections 187(8) and 187A of the International Business Companies Act;<\/p>\n<p>ii) Section 17(6) of the Exempted Limited Partnership Act; and<\/p>\n<p>iii) Section 25(7) of the Investment Condominium Act, 2014.<\/p>\n<p>Entities created after 31 December, 2018 are not entitled to the transitional exemptions.<\/p>\n<\/div><\/section><\/p><\/div><div class='av-flex-placeholder'><\/div>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-kzv03-d18dcaa6cc19df953f58c1e3e7589bd4\">\n.flex_column.av-kzv03-d18dcaa6cc19df953f58c1e3e7589bd4{\nbackground-color:#ffffff;\n}\n<\/style>\n<div  class='flex_column av-kzv03-d18dcaa6cc19df953f58c1e3e7589bd4 av_one_fourth  avia-builder-el-11  el_after_av_three_fourth  avia-builder-el-last  flex_column_table_cell av-equal-height-column av-align-bottom  '     ><\/div><\/div><!--close column table wrapper. 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